8-KMaterial AgreementsFinancial Events

EQUINIX INC 8-K Report, Material Agreement (Jul 5, 2012)

Filed July 5, 2012For Securities:EQIX

Summary

Equinix, Inc. (EQIX) announced a significant update to its debt structure with the entry into a new $750 million Senior Credit Facility on June 28, 2012. This facility comprises a $550 million revolving credit facility and a $200 million term loan, with a maturity date of June 2017. The company has already drawn the full $200 million under the Term Loan Facility, which will be used to refinance existing indebtedness. The Revolving Facility is available for general corporate purposes and includes a sublimit for letters of credit, offering flexibility in foreign currency borrowings. This new credit facility replaces Equinix's previous $150 million unsecured revolving credit facility, which was terminated concurrently. Additionally, proceeds from the Term Loan Facility were used to fully prepay and terminate a multi-currency credit facility held by certain international subsidiaries, amounting to approximately $200 million. The refinancing and new credit facility appear to be strategic moves to optimize Equinix's capital structure and enhance financial flexibility.

Key Highlights

  • 1Equinix entered into a new $750 million Senior Credit Facility on June 28, 2012, consisting of a $550 million revolving credit facility and a $200 million term loan facility.
  • 2The Senior Credit Facility has a maturity date of June 28, 2017, subject to certain conditions.
  • 3The full $200 million commitment under the Term Loan Facility was borrowed on July 3, 2012, to refinance existing debt.
  • 4Proceeds from the Revolving Facility are designated for general corporate purposes, with a $150 million sublimit for standby letters of credit.
  • 5The Revolving Facility allows for borrowings and letters of credit in multiple currencies, including USD, CAD, AUD, HKD, SGD, JPY, EUR, GBP, and CHF.
  • 6The new credit agreement replaced a previously existing $150 million senior unsecured revolving credit facility.
  • 7International subsidiaries prepaid and terminated a $200 million multi-currency credit facility using proceeds from the new Term Loan Facility.

Frequently Asked Questions

The primary purpose of the new $750 million Senior Credit Facility is to refinance existing indebtedness and provide Equinix with enhanced financial flexibility for general corporate purposes. Specifically, the Term Loan Facility's proceeds were used for refinancing, while the Revolving Facility is available for ongoing operational needs.

The Senior Credit Facility has a maturity date of June 28, 2017. However, this is subject to the satisfaction of certain conditions related to Equinix's outstanding convertible subordinated notes.

The new facility has led to the refinancing of existing debt. The $200 million Term Loan Facility was used to repay outstanding balances on other credit lines, including a $150 million unsecured revolving credit facility and a $200 million multi-currency credit facility held by international subsidiaries. This suggests a move towards a more centralized and potentially cost-optimized debt structure.

The Revolving Facility allows for borrowings and the issuance of letters of credit in United States Dollars and certain foreign currencies, including Canadian Dollars, Australian Dollars, Hong Kong Dollars, Singapore Dollars, Japanese Yen, Euro, Pounds Sterling, and Swiss Francs, as well as other currencies that may be agreed upon by the lenders.